GOP?solved problem

August 28, 2012

I was surprised to read the letter to the editor stating that the state's budget surplus is not real. The Minnesota Legislature did solve what was once projected as a $6.2 billion budget deficit at the end of 2010 and turn it into a $1.3 billion surplus in less than one year. Even though Minnesota's legislative majority is Republican, it should be noted that Minnesota's Management and Budget commissioner, who is not a Republican, has stated that Minnesota has a surplus. The state's expert has spoken.

Typically, schools receive 90 percent of their government funding in the first month of the biennium and receive the remaining 10 percent at the end of the biennium, or 90/10 funding. Because of the state's need to balance its budget, lawmakers enacted a 60/40 school shift. This school shift has caused some districts to borrow money, which the writer claimed will affect property taxes. She is apparently unaware that roughly half of the school shift enacted in 2011 is repaid, thanks to the budget surplus. In fact, the Republican majority attempted to repay the remainder of the 2011 shift with the surplus money, but Gov. Mark Dayton refused to sign the bill. This was not the first school shift proposal, as Gov. Dayton proposed an even larger school shift extension the previous year (50/50 shift), and the Democrats that ran the Legislature three years ago were the party that enacted the $2 billion funding shift in the first place. In other words, of the $2.4 billion referenced by the writer, $2 billion was created by DFL leadership.

Because it was of concern to the state Legislature that the schools needed to borrow money, we funded an extra $51 per pupil in permanent funding to offset the shift, even though the actual borrowing costs were estimated at only $5 to $10 per pupil. Therefore, the borrowing costs were more than covered by the state, eliminating the need to raise additional funding through property taxes.

The writer spoke of the effect that the state shutdown had on our state finances. I agree with her, as the government shutdown by Gov. Dayton was completely unnecessary and detrimental. Even though Gov. Dayton was given a bill that would keep all areas of government operating while negotiations continued (the "Lights On" bill), he refused to sign it and instead chose the shutdown. Ironically, he decided to end the shutdown by accepting the same budget proposal that was offered to him before the shutdown.

The writer is correct that fiscal discipline is needed now more than ever, and that it is not ideal for schools to be put in the position where borrowing money is needed. But, the government's finances did not reach this state overnight. When the Democrats took control of the House in 2008, when given a surplus, they spent the surplus in the first session and immediately asked for increased taxation. It was this scenario that put the state in the depleted fiscal condition in which the school shift was necessary. After Republicans regained control and brought about the economic turnaround resulting in the surplus, we were finally able to put the state back on a stable fiscal path. Therefore, when presented with the facts, one can see that the DFL created deficit after deficit when it was in charge, and our economy is now in much better shape with Republicans in control and implementing fiscal discipline.